November 30, 2009

N.Y., learn from New London: It offers a critical cautionary tale on the use of eminent domain

NY Daily News
by Richard Lipsky

Ah, the irony  pro-Atlantic Yards lobbyist Richard Lipsky op-editorializing in the Daily News about New York needing to exercise restraint in its use of eminent domain. "Brutally weird," to borrow Norman Oder's favorite phrase.

While he shilled for Ratner, Lipsky has been on the right side of eminent domain fights at Willets Point and Columbia University, representing property owners. Which would seem to indicate that Mr. Lipsky's point of view adheres closely to the sources of his paychecks.

There were two major developments in the use of eminent domain this month. Now the question is which of the two will be more influential in determining the future use of this controversial power in New York.

The first landmark was the shocking decision that the Pfizer drug company was abandoning New London, Conn., taking 1,400 jobs with it. This came just over five years after the pharmaceutical giant was being hailed as the linchpin of a new economic development project that would revitalize the financially strapped town. In that effort, Pfizer and New London were aided and abetted by the use of eminent domain to force evictions of home owners and small businesses, including one named "Kelo," who unsuccessfully fought them all the way up to the Supreme Court.

As a result of the deal's collapse this month, the city is now not only stuck with a huge vacant parcel, but a $78 million bill for all of its wasted efforts.

The second development was last week's 6-to-1 ruling by New York State's highest court throwing out a lawsuit against the Atlantic Yards development and strengthening the state's hand to condemn swaths of land as blight and initiate eminent domain proceedings here. This will likely pave the way for the start of that long delayed mega-project - and more broadly, city and state officials will no doubt be emboldened, taking the court decision as their cue to employ the power ever more aggressively.

Rather than running with their court-blessed authority to condemn and take property, Mayor Bloomberg and Gov. Paterson should instead be looking to the Pfizer-Kelo mess. It offers a much more relevant real-world warning on the dangers of zealous use of the eminent domain authority.

...wherein Richard Lipsky, property rights crusader, explains why eminent domain is okay when it's used for his client, but not when it might be used against his client.

Now, we have always been cautious in our position on eminent domain-and have supported the Atlantic Yards development for a number of clearly stated reasons while, at the same time, representing Forest City Ratner, the project's developer. We believe that, in certain cases, it can be a legitimate tool for development. The case of Willets Point is not one of those times where ED makes either fiscal or public policy sense. It is too large, too costly, and way too speculative-particularly in these very scary economic times; as New London could tell you.